Business travel

Taxes and transport

Taxes pay for things

MARTIN O'MALLEY, the Democratic governor of Maryland and former mayor of Baltimore, is sometimes spoken of as a contender for his party's presidential nomination in 2016. It's probably to Mr O'Malley's advantage that David Simon, the creator of the legendary HBO police series The Wire, has argued that Mr O'Malley is one of the inspirations for the show's character Tommy Carcetti, a Baltimore city councilman who eventually becomes mayor of the city and governor of the state. But presidential speculation and parallels to fictional politicians aren't the only things putting Mr O'Malley in the national spotlight these days. He's drawing praise from the left for planning to increase Maryland's petrol tax.

In America, petrol taxes are often earmarked to pay for road, highway and other infrastructure improvements. But like many states, Maryland does not index its petrol tax to inflation, so over time, the real value of the tax has fallen. Mr O'Malley's plan would phase in a 6% sales tax on top of the existing 23.5 cents-per-gallon tax and gradually replenish Maryland's Transportation Trust Fund. The governor also wants to make it harder for future lawmakers to remove money from the trust fund to pay for other priorities or fill budget gaps.

Public-transport advocates, environmentalists wanting higher taxes so people will drive less, and lefty bloggers all seem happy with the plan. But Mr O'Malley's proposal has even drawn praise from the New York Times editorial board, the institutional voice of a certain subset of America's centre-left. Why the hooting and hollering? America's liberals are happy to finally see some politician, anywhere, argue for new, broad-based taxes to pay for government priorities. Even Barack Obama says he only wants to tax the rich. Mr O'Malley's tax would hit everyone who drives. Don't think that this signals the end to America's tax revolt—far from it. But Mr O'Malley makes a compelling case for why reinvestment might require more broad-based tax increases. America's infrastructure is crumbling. It will cost money to fix it—and delaying maintenance and postponing key projects will only cost taxpayers more in the long run.

AS long as a tax is used for the specific necessary purpose such as maintaning roads, the public will accept it. Contrast that to the EU's ridiculous airline carbon tax, which will do what exactly? Reduce carbon emissions? How? By causing fewer travelers to fly to Europe in protest?
If the tax were used for something concrete such as producing cleaner burning jet engines or cleaner fuels that may be OK. But it is merely a way of getting revenue for it's bloated governments.

But 2% of the population owns much more than 47% of the wealth.
Also, this 2$ derives all of its wealth through owning the rights to other people's work: via dividends, rents, interest and capital gains. We work; they own. We invent; they collect. This fundamental inequity is the basis for the mildly corrective effects of progressive taxation.

Also, you state a fallacy typical of a mis-informed, right-wing thinker.
Even if a small percentage of the eligible tax base pays a majority of federal government income tax revenues, that is only because you are looking at gross amounts of revenue and then doing a percentage breakdown according to income. What you fail to account for is that the wealthiest now pay a substantially LOWER percentage of their income in taxes than do middle-income earners. This is because the Neocons and the Corporatist Dems slashed long-term capital gains tax to 15% - less than half of what upper-middle class workers have to pay and substantially less than what average middle class workers have to pay. And to think that the wealthiest 2% are earning the great lion's share of their income via titular entitlements - many of which are inherited - to the proceeds generated from other people's work. That the small % that Capitalist overlords are taxed ends up constituting substantially more revenue than the large % the wage workers are taxed just underscores how unfathomably unequal and unjust our society and tax code are.

Furthermore, you are only looking at the Federal Income tax revenue breakdown. If you look at payroll tax and social security - because of the unfair caps on taxable income - the workers more or less self-fund the program: the titans do not contribute much more than the secretaries and IT staff. State revenues often rely heavily on sales taxes and other consumption taxes, licensing & registration fees, and often have flat income taxes and flat property taxes...thus they are more regressive, on average than Federal taxes.

That said, aside from trying to spin the facts and distort reality, it is true that Federal and State governments waste an unfathomable amount of the $ we give to them. Example: a military budget that is 7.6x higher than that of the next highest spender, China. U.S. Military spending comprises 47%-50% of world military spending. That, and it leads to a near yearly violation of the UN treaties of which we are a party. Another big waste: mass incarceration and the War on Drugs. While this may help private prison contractors and serve to keep wages low by creating a caste of untouchables, it produces one hell of a police state. The U.S. incarcerates 1,000 per 100,000 of its citizens, while the next highest jailer, Russia, locks up only 550 or so of its people. Most of Western Europe is below 100. This discrepancy, it turns out, is not due to a difference in the rates of crimes - of any given type - committed. It is almost exclusively due to criminalization of petty crimes (like drug usage, selling raw milk or stealing a pack of chewing gum) that our neighbors do not criminalize, and imposing the longest sentences for all classes of crime in the world. So lets stop building more prisons and start building more non-profit housing (whether publicly or privately owned) and homeless shelters, both of which are substantially cheaper than prisons and have been shown to reduce recidivism.

Eventually, American politicians (not exclusively them -- see Greek politicians -- but definitely including them) are going to have to stand up and tell their constituents that there are no free lunchs. If they want government to do things, they are going to have to pay for it.

It is heartening to see the beginning of what I pray is a trend in that direction.

This tax is far less onerous than most, specifically for the reasons the author outlines above . It is not direced at a particular subset of american society, but rather equally at all members. Furthermore, the revenues would presumably be directed towards infrastructure, which is one of the almost miniscule areas where government does provide a better product than the free market would have. In short, it doesn't seem particlarly left wing at all. It certainly lacks the class warfare that emerge in almost any left-leaning conversation regarding taxes

What you are proposing is fascism, or at the very least corporatism. State slavery. Where private property ceases to exist. You get to keep what the state lets you. My question for you is whether or not the most highly productive citizens, those who earn big paychecks, would be forced to provide their serivces at a discount, or possibly for free. Because, while it sounds like you are more than willing to deprive a citizen that which he or she has been given willingly in exchange for a good or service, do you still expect them to provide those same goods and services? Or would they be given the option of taking the easy road as well?

Your posts are littered with post Marxian rhetoric, but outside of a very small segment of society these ideas are not widely appreciated. Anyone who ever took an econ class understands that the labor theory of value is pretty much a historical relic. Even the communists appear to have little compunction about abandoning it. It's also interesting that you brought up cap gains (assuming you are talking LTCG). You wanna know who the biggest investor class in the US is? Retirees. You double LTCG taxes, and grandma and grampa see their incomes decrease drastically. If you want to pick a fight, it's best to do it with a group that is less politically astute, and less involved in the electoral process. Just sayin.

With 2% of the population paying 47% of the taxes, at some point, the rest have to chip in. The notion of a specific purpose tax on the people who need that service makes more sense than simply grabbing more from the rich.

Also, why is there no discussion on whether the government can be more efficient in using the tax money they already collect? Or, does everyone assume that governments always spend money wisely.

God forbid any serious politician even utter the phrase "capital gains tax" lest a swarm of lobbyists descend on them like locusts and devour them in seconds. Conservatives are totally devoid of compassion until something threatens to cut into the profits of the ultra-rich-- everyone needs to suck it up and work harder, except those benevolent "job creators" who think only of the common good, who never spend a cent on themselves and only want to use their power and influence to employ as many people as possible.
It's a demonstrable fact that the if you're very poor and can't save, close to 100% of your income goes towards stimulating the economy. The rich store away vast amounts of wealth that benefit no one except themselves-- they won't even keep it in American banks, let alone use it for the good of our economy. They have the gall to pat themselves on the back for "creating jobs", aka creating a vast corporate empire where you make 500 times what your wage slaves make. The rich have been taxed less and less over the past decades, giving them more and more to spend, so if conservative economists theories were anywhere close to correct, we'd be seeing the disgustingly rich return to only filthy rich-status, and the poor start to approach a decent standard of living. The opposite is happening.

Yeah. Taxes sure pay for things, all right. In 2008, California guaranteed that for $35.7 billion, voters would get High Speed Rail. Oh - and investors would pay for most of it. Mmm hmmm. The latest conservative cost estimate is more than $200 billion, covering both construction ($117.6 billion) and operating expenses ($97 billion). Factor in another $200 billion, to cover bond/debt interest, plus another $100 billion for expected, undisclosed fraud and embezzlement, and it comes to half a trillion dollars.

Our train here in New Mexico isn't even high-speed! It takes 1 1/2 hours from ABQ to Santa Fe, which is a 1/2 hour drive! We still don't know what the final tally will be; we just know it will be astronomical! Total fraud to the taxpayer.

"The Rail Runner collects about $3.2 million a year in fares and has an annual operating budget of about $23.4 million. That does not include about $41.7 million a year in debt service on the bonds – a figure that include eventual balloon payments."

Bringing up retirees is a red herring and a false narrative used in some circles. Most retirees are predominantly in fixed income (they cannot afford to take equity exposure risk) getting dividends most of which are taxed as regular income. They may also have a decent chunk in retirement accounts - regular IRAs and rolled over 401k plans which are all taxed as regular income not as capital gains even though most of the gains may have come from capital gains.

Low capital gains primarily benefit the younger rich who can afford to take equity risk - mostly the 2%.

The problem with taxation policy in the US is the fixed rates for taxing wages and capital. This sets up a situation that is difficult to change and out of sync with the economic condition. For example, when capital is cheap and plenty, there is no reason to encourage with low capital rates. You need low capital gains rate when capital is more difficult to come by to promote investment. Similarly, you don't need high income and payroll taxes when unemployment is high but can do so when wage inflation is a threat with low unemployment.

What we really need is an adaptive system where rates are automatically reset tied to some economic barometers so we don't get into this ideological battles of labor vs capital. Right now treatment of capital has become too lenient when capital is very cheap (low interest rates) and there is a lot of money available. Ideal for people with capital but not so good for anybody else.

Commenters here can whinge all they want about taxes and tyrants, lefties and fascists, but the fact is that a bridge in Minnesota collapsed in 2007 killing 13 people. Explain to the families of those people about your principled stand against raising tax money to maintain infrastructure.

And if you think tolls can do it all, then you can explain to me how collecting taxes at booths along a highway is more efficient than taxing fuel, and how we would collect the tolls starting from your driveway.

If you want low taxes, move to Pakistan - they are among the most lightly taxed countries in the world. Be sure to let us know how that works out for you.

1. The bottom 50% do pay income taxes.
2. The top 1% pay much less of a portion of their income in taxes than the upper 1/2 of the bottom 50%.
3. Medicare and Medicaid would cost slightly over 1/2 as much as they currently do, cover tens of millions more people and deliver more comprehensive service if we were to adopt a single-payer public health insurance scheme. That's why the United States is the only industrialized country in the world without a public health insurance system or government mandated price controls on private health insurance. The uncompetitive, privately-owned health insurance market is the primary reason for drastic medical inflation in this country. In addition to the unnecessary inefficiencies of each insurance company having its own redundant bureaucracy, you have the unnecessary profit margin and a carte-blanche check for providers to keep ratcheting up prices. Health insurance and provider markets are not competitive enough to deliver maximal value: they still make high margins, which is - according to classical and neoclassical economic paradigms - a sign of uncompetitiveness.
4. Social security is solvent and was only put into risk by G.W. Bush and others stealing from its trust fund. Lift the arbitrary tax cap on amounts over $101,000+ for Social Security and the similar ridiculous caps corresponding to Medicare and Medicaid, and eliminate Medicare part D, and the programs would be solvent. The best way of limiting medical inflation is to enact a universal insurance system. Instead of 57 million Americans not having ANY line to wait in, some lines would get longer in certain states. Then again, waiting times in the US for the insured are longer than those in France...which covers all and pays less for their insurance. Private insurance would still be optional, so rich people could still have better care than the poor...if that's what you're afraid of.
5. Interest payments on the public debt - most of which is payed to private, for-profit corporations, who derive their existence and authority from the state - could be **eliminated** if we were to have a publicly owned central bank...like many countries in the world do. A public central bank would be far MORE transparent than the ultra-cryptic Federal Reserve, which could only be audited by the GAO - and partially audited at that - after a Supreme court decision was passed in 2010. If people are worried about runaway deficits as a result of a public central bank, may I raise the following indisputable facts:
A. Private central banks have had no hampering effect on public deficit levels. So that completely defeats that argument
B. A much greater amount of what is spent on deficit would go towards the provision of goods and services as opposed to unnecessary interest payments.
C. Private central banks have demonstrated little efficacy at hampering inflation or boosting employment with their monetary policies, and we've had a century of evidence to prove that this is the case. Public central banking systems, such as Australia's have maintained lower cost inflation, higher employment and a much more stable currency value in the last 15 years than the United States.
D. Interest rates to consumers and businesses would be much lower with a public central bank and that would help with all kinds of capital formation and entry barrier reduction.
6. The combined war and security budgets are well over $1.0 per anum Trillion in this country. We have far more guards, cops, security wardens and other types of security and policing jobs in this country than teachers and doctors. Maybe also, if we were to scrap the evil War on Drugs and cut our bloated prison population - 1,000 per 100,0000 people are now behind bars: far and away the highest incarceration rate of any country in the world - as well as repeal 3 strikes you're out legislation, we'd be on our way to more fiscally healthy society.
7. The combined effective tax rate for many middle class wage earners - say single individuals earning between $45,000 and $110,000 each year - is actually **GREATER** in the US than the effective tax rates that many of these same people would pay in a country with a lot more Socialism than the US, like Germany or Austria: and yet we get shit for our money due to graft, corruption, private central banking and absence of public health insurance.

The first thing is to get all States and the Federal Government to be able to issue debt at zero percent interest. 10 states now have bills for public state banks, says Forbes. Let's hope at least one of them passes. That means states like Massachusetts won't have to be paying 6% interest on bonds held by J.P. Morgan while J.P. Morgan get Trillions of dollars in ZERO PERCENT loans from the Fed. Reserve. Fine: establish limits on how much debt can be issued as a percentage of GDP or a percentage of tax revenues. Just eliminate the unneeded usury.

We,in Britain, had a Road Fund Tax which was introduced so that those who clamoured for better roads for their cars contributed to the cost. Those without cars, who used horse transport did not pay. Of course as the number of cars grew that hypothecated revenue looked more and more attractive to the government who wanted to use it fot other things. It was the crooked Minister of the day, Lloyd George, who raided that specific fund and Britain continued to have poor roads,lagging behind much of Europe for many years.
I doubt if it would be long before Marylands proposed extra gasoline tax went the same way.

I'm a fiscal conservative and I have no problem with paying taxes if I get something for it. As it now stands however, the majority of the US Federal budget goes to transfer payments (approx $1.55 trillion - Medicare/Medicaid/Social Security) and Defense (approx $700 billion) leaving approx $1.3 trillion for everything else - including debt service.
While I am glad to be defended I see no more direct benefit than do any allies we support, and while I may one day receive Social Security and Medicare benefits, those promises are inadequately funded for my life expectancy and the government is amassing huge current deficits with mo end in site.
I'm happy to pay for a nice road or school or community center or anything I can use. I am less happy when my taxes disappear into the ether and I am told I must pay more while the bottom 50% can contribute nothing in the way of Federal Income Tax.
(BTW - I know they pay sales tax, Social Security and Medicare....however since the retirement programs are underfunded they are not paying enough there either.)

Besides completely ignoring my corrections on the original poster's misleading claims about income tax revenues (which has little to do with Marxism or any other economic theory), I object to your false and inaccurate portrayal of my views as supporting a Marxian doctrine of "the labor theory of value." I also fiercely and vehemently object to your illegitimate accusation that I support or propose Fascism or Corporatism - the fundamental opposite of what I support.

I. The "Labor Theory of Value" is false when it comes to Price Determination; correct when it comes to Property Rights.

Let me start with your false claim that I support Marx's version of the Labor Theory of Value - something he clicked and dragged with little alteration from David Ricardo, on whose economic principles he based his own general theory. I do not support it. In Marx's day, the Labor Theory of Value was a mainstream perspective: it began to be challenged in a very substaintial way near the end of Marx's life by Marginal Utility theorists like William Jevons and Marie-Esprit-Léon Walras. I agree - with some key differences - with the conception of property rights or entitlement endorsed by the Labor Theory of Value but completely disagree with the theory of prices it purports. ***When people say "the Labor Theory of Value" has been discredited - which it has - they are only referring to the use of the theory as an explanation for price levels.*** The specific property rights conceptions entailed in Marx's version of the Labor Theory of Value/Surplus Value Theory are moral and ethical perspectives belonging to the domains of law and philosophy and cannot be affirmed or discredited in economics, which does not deal with who SHOULD own what under what conditions, for what reasons. Richard Whately in 1832 made the following claim, contradicting Ricardo's view, which would be adopted by Marx:

"It is not that pearls fetch a high price because men have dived for them; but on the contrary, men dive for them because they fetch a high price."

On this point - which again refers to PRICES and not a theory of entitlement - I agree completely with Whately and disagree with Marx. As far as I am aware - and I may be imperfect in my characterization - Marx claimed that market prices are determined in surplus of some inherent minimum mandated by the implicit utility commodities and manufactures obtain through the form of labor required to extract or transform them. While this is not true, even Marx accepts - via his theory of competition - many aspects of Marginal Utility theory.

You make the common fallacy of confusing value with price: similar to the one Ricardo and Marx make. When I use the word "value," I use it **only** to designate a moral/philosophical viewpoint of property rights - specifically, the difference between organic entitlement and titular entitlement (which I'll explain below). I do not use the word "value" in connection with any concept of how numerical prices and costs are determined in a market system: they are determined marginally.

Organic entitlement is the notion of what property, usage or custodial rights *inherently* belong to certain parties by virtue of those parties' existence or by virtue of those parties activity in relation to other things or persons.
Titular entitlement is the notion of what property, usage or custodial rights belong to certain parties by contract by virtue of their sale or signatory agreement. Buying and selling with currency on a market are contractual activities.

Organic entitlement is recognized in many of our property and contract laws and is distinct from titular entitlement, also defended in the law. Over time - or perhaps always - protections of organic entitlement have been greatly overshadowed by protections afforded to titular entitlement.

You are more thoroughly familiar with the situation than I, but it was more complex than either of us can completely describe in a short essay.

From what I have read, there was a design flaw, but this flaw was noted years before the collapse. There were ongoing problems with certain elements that were repaired after having cracked. Ultimately, there was a discussion of a systemic patching of the bridge but action was put on hold in part because of cost and an inspection regime instituted instead. Then it fell.

Whatever the reason for the bridge tragedy, my essential point remains the same. Infrastructure requires maintenance. Road infrastructure is paid for by taxes that have not increased with inflation and have in fact decreased with improved auto fuel efficiency and with drivers driving less as a consequence of higher fuel costs. If you do not maintain your house, it becomes a run-down dump. I do not care to live in a run-down dump of a country and a gasoline tax may be the most efficient way of paying for infrastructure maintenance.

My understanding is the bridge collapsed due to the failure of an under-sized gusset plate between supporting beams - a design error not a funding error. The bridge was in fact being renovated at the time of the collapse so money was not an issue.
I am a Registered Engineer in the State of Minnesota so I did have an interest in this particular situation.

Go on drinking that Kool-Aid. The latest information I can glean from the web is that the bottom 50% of taxpayers paid 2.25% of federal income taxes....essentially nothing.

Social security is currently taking in less than it is paying out and the Trust Fund that is making up the difference consists entirely of debt from a country (USA) that is over %$15 trillion dollars in the red.

"The first thing is to get all States and the Federal Government to be able to issue debt at zero percent interest"....seriously...what planet did you come from? Who but an imbecile would loan money at zero per cent? If you have some, I would be willing to borrow as much as you have.